Abercrombie & Fitch 3rd-quarter Profit Falls

MAE ANDERSON

NEW YORK (AP) — Preppy clothing seller Abercrombie & Fitch Co. will add new items at lower prices and continue expanding internationally — where sales are stronger than the U.S. — to combat declining profit as the U.S. economy remains weak.

The company reported Friday that its third-quarter profit fell 39 percent, but that was less than expected and investors pushed shares up 7 percent. Revenue fell 15 percent.

Abercrombie & Fitch's sales have slumped, and it has lost market share to lower-priced competitors such as Aeropostale Inc. as it kept prices high and invested abroad during the recession.

In recent quarters it has bowed to the recession and begun marking down items, but CEO Mike Jeffries said Friday that the company plans to add lower-priced inventory in the first quarter, rather than relying on markdowns that he said might hurt its image.

"We are aspirational brands for our customer but are reacting to the current environment and trying to improve the domestic sales trend," said Jeffries. "Domestically, as you all know, we are seeing that the customer is extremely deal-driven, price-conscious, and we are aware of that."